Housing or utilities

If the accommodation you provide to the employee is in a prescribed zone, see Accommodation or utilities provided by the employer in a prescribed zone.

If your employee is a member of the clergy or a religious order or a regular minister of a religious denomination, they might be entitled to claim a clergy residence deduction. For more information, see Clergy residence.

Housing or utilities – benefit

If you provide an employee, including the superintendent of an apartment block, with a house, apartment, or similar accommodation rent free or for less than the fair market value (FMV) of such accommodation, there is a taxable benefit for the employee.

You have to estimate a reasonable amount for the housing benefit. It is usually the FMV for the same type of accommodation, minus any rent the employee paid.

In addition, the amount you pay on behalf of, or reimburse to your employee for utilities (such as telephone, hydro, natural gas, water, cable or internet) is also a taxable benefit. This is the amount that you include in the employee's income as a utilities benefit.

If the employee occupies the accommodation for at least one month, the value of the accommodation is usually not subject to the GST/HST.

There are special circumstances that reduce the value of a housing benefit.

Housing or utilities – allowance

If you give your employee an allowance to pay for rent or utilities, include the allowance in your employee's income as a taxable housing or utilities benefit or both.

Payroll deductions

The taxable housing benefit is pensionable. Deduct CPP contributions and income tax. If the taxable benefit is paid in cash, it is insurable. Deduct EI premiums. If it is a non-cash benefit, it is insurable if it is received in addition to cash earnings in the pay period. In this case, deduct EI premiums. If no cash earnings are paid during the pay period, it is not insurable. Do not deduct EI premiums.

Employees who qualify for the clergy residence deduction may reduce their remuneration subject to income tax and CPP contributions. For more information, see Clergy residence.

Reporting the benefit

Report the taxable benefit for the utilities in box 14, "Employment income," and in the "Other information" area under code 40 at the bottom of the employee's T4 slip. Report the taxable benefit for housing in box 14 and in the "Other information" area under code 30. For more information, see T4 – Information for employers.


Special rules apply if you pay for utilities (or provide them) for a member of the clergy. You must add eligible utilities (electricity, heat, water, and sewer) for clergy members to the taxable benefit for housing under code 30. Report all other utilities under code 40.

For more information, go to Fill out the slips and summaries.

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